Iran Mercantile Exchange

at a glance:

Mercantile exchanges and new financial instruments used in them could be considered the last chain of the process of expanding and development the markets In response to the need of economy to increase transparency and informing, managing risk arising from price fluctuations, Organizing the markets in order to improve efficiency and in summary reduce transaction costs.

 Iran Mercantile Exchange was established on September 20, 2007 in accordance with article 95 of the new law of the Securities Market of the Islamic Republic of Iran and following the merger of the agricultural and metal exchanges of Tehran. The merger marked a new chapter in Iran capital market providing endless trading opportunities for the clients in and out of the country. Various sectors of economy and national industry benefit from the exchange operation. The scope of the services is as under:

  - Performing as the first market providing access to the initial offering of the listed commodities

  - Price discovery and price making for the OTC,  secondary markets and the end users

  - Providing venue for government sales and procurement purchases

  - Providing Trading platform and user interface

  - Providing Clearing & Settlement services

  - Risk management

  - Technology services

  - Training and education of the market participants

 

  •  Advantages of Mercantile Exchange:

1.      Organized, Regulated, Monitored

2.      there is the possibility of Risk coverage, Risk distribution and Risk transfering

3.      provide security of product quality, product quantity, amount of product and  term deal

 

 

 

 


 

 

 

  • Products in Mercantile Exchange

Industrial Products and Commodity, Gold, Oil Products and Petrochemicals, Agricultural, Multi-Commodity, Gold Coin Futures.

In general has defined four market to trading variety of admitted contracts in Iran Mercantile Exchange that included Spot market, Derivatives, Financial market and side market.  In each of these markets various contracts used for trading different goods which are outlined below.

Spot market: That included a variety of petrochemical products, metals and minerals mining, Oil derivatives, etc. trades in this group. Include the following contracts:

  1. Cash trades:  It is defined as prompt cash payment against taking prompt delivery. After matching the trade, the buyer shall pay the full amount of the contract value. The clearing house issues the warehouse warrant (receipt) and the customer takes the delivery of the commodity within 72  hours or more but limited to 10 days as per offering notice delivery information
  2. Forward: It is prompt payment against forward date delivery. The client pays in advance the contract value effective after matching the trade and receives the commodity by virtue of the warrant issued by the clearing house within the period specified in the offering notice on delivery information. The seller receives the contract value within 72 hours or within the time specified in the offering notice but not later than 10 days. The offering details and delivery date is also announced to the brokers by the trading floor supervisor before the trade.
  3. Credit: It functions as deferred payment against prompt delivery. In this type of transaction, the buyer pays in different payment according to the terms stated in the notice of offering and receives the commodity in advance after matching the trade and based on the warrant issued by the clearing house. The seller shall receive money from the clearing house within the period specified in the notice of offering.
  4. Derivatives: A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. The types are as follows:
  5. Future contracts: Is based on gold coins. A futures contract is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future. Futures contracts are standardized to facilitate trading on a futures exchange and, depending on the underlying asset
  6. Options: An option is a financial derivative that represents a contract sold by one party (the option writer) to another party (the option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date). Including Call option and Put option, and Is based on gold coins.

Financial market: include of  two Financial instruments Which are described below:

  1.  Securities Standard parallel predecessor: It Is a contract under which a certain amount of product Based on standard parallel futures contracts would be sold. The deadline shall be settled in accordance with the contract specifications, and goods must be delivered at maturity.
  2.  Certificates of deposit product: Securities that confirm the holder's ownership of a certain amount of product. It is backed by a standard warehouse receipt is issued by warehouses approved by the Mercantile Exchange.

 

Side market: side market of Iran Mercantile Exchange is focused on sub-market that do not Have a standard feature or due to the lack of continuity of supply, not having the possibility of accepting and dealing in main physical commodities trading market of Mercantile Exchange

  • How to purchase

 Documents required for the purchase of Iran Mercantile Exchange:

Persons applying for a deal on Iran Mercantile Exchange must first receive a scholarship Code. Requirements for Obtaining a client code is as follows:

1.         Application client code has been completed and brokerage confirms it.

2.         Copy of the Articles of Association of the company.

3.         Copy of the last official newspaper of change of company.

4.         Economic and national ID code.

5.         last financial statement of the last financial period of  company plus the latest auditor's report and legal inspectors.

6.         Copy of identification of members of the Board of Directors and CEO.

7.         Other documents and certificates in accordance with Declaration of  Iran Mercantile Exchange.

 

Product acceptance conditions for supply in Iran Mercantile Exchange:

1.      The applicant must have reliable experience in the commodity market of accepted product, there is also a clear view of the continuing activities of the applicant.

2.      The supply of goods by the applicant in a manner that allows discovery a fair price in Mercantile Exchange.

3.      The product should not be subject to legal restrictions, including restrictions in legal pricing and monopoly in supply or demand which prevents fair discovery of the price product.

 

 

 

 

Energy exchange:

Energy exchange as the country's fourth largest bourse In four areas, was on the agenda in 2013 capital market of iran; Securities Power Inductors, coal, oil and Green energy. In the first phase power is traded parallel predecessor, In the next phases, Derivatives market Will be active that includes of Future contracts, Call options and Transactions in the international arena.

Trading in the Energy exchange is in the form of Securities Standard parallel predecessor In that way, at the time of the transaction the contract must be paid in accordance with the schedule specified in the contract specifications and the underlying assets must be delivered at maturity.

With the launch of this market, the possibility of buying and selling energy, financing for producers, supplying energy to  distributors and consumers, Discover the daily price of energy, hedge, transaction transparency, facilitate the exchange of energy and reduce transaction costs In energy trading.

Energy exchange has three physical market, derivatives and side market. Physical market includes three boards of Electricity, oil and gas, and other energy panel, Derivative market includes Securities Standard parallel predecessor, Future contracts and Options.

 


 

 

 

 

 

 

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